Meek to Save the Wealthy

Kendrick Meek tries to help Bernie Madoff victims

Receive the latest business updates in your inbox

Paying taxes on gains you never really made? Kendrick Meek is here's to help.

Updated at 2:25 PM EDT on Monday, Mar 16, 2009

Congressman Kendrick Meek is smart. He's proposing a bill to give relief to Bernie Madoff's victims, nearly a fifth of whom live in Florida. Madoff was like a neutron bomb dropped on Palm Beach County's wealthy -- the people remained standing but their money evaporated. Meek's proposal offers tax relief to victims of Ponzi schemes on the theory that they were paying taxes on money that never existed.

"This legislation provides some degree of relief to harmed investors, allowing them to recoup taxes paid on phantom income," Meek said in a statement. "While their initial investment cannot be saved, the taxes paid on that income can."

Bernard Madoff & His Victims

Meek's proposal echoes what Ronnie Sue Ambrosino, who lost $1.7 million to Madoff, she said in a story in the April issue of Vanity Fair.

"I need people to know that the S.E.C. failed miserably for at least 10 years, if not more, that they were warned, and that they didn't stop this devil from doing his deed," she told the magazine, adding, "I need people to know that the I.R.S. has been collecting taxes on phantom income for at least 10 years."

The story did a good job describing what it's like to go from super-wealthy to not so wealthy overnight. People with $100,000 monthly AmEx bills are selling off $17 million condos before they are foreclosed on.

But this is why Meek is smart. He just announced he's running for the U.S. Senate seat being vacated by Mel Martinez. Not only is this a bit of high-profile legislation that will put him in good stead with potential voters, but if he can help the multimillionaires of Palm Beach County hang onto a few of their millions, he might see some of it come his way as campaign contributions around election time.